Forexpros.com Daily Analysis - 06/09/2010

[Forexpros04]

ForexPros Daily Analysis September 06, 2010


Free webinar on ForexPros - How to Get Direction Right by Looking for Clues in Forex Price Action
Expert: Kris Matthews
When: Thu, Sep 16, 2010, 07:00 ET

Unfortunately many traders fall into the trap of following technical analysis systems without understanding what charts are really telling them about the behavior and sentiment of the market. Kris Matthews presents in the final webinar of this four part series on trading sentiment, how to spot certain recurring types of price action that reveal valuable clues about the sentiment/direction of the market going forward.

Click here to join free

---

Euro Dollar

The Euro benefited from the US jobs report to approach 1.29 on Friday, and penetrated it after the market opened again last night. It seems like the Euro is targeting the top of the rising hourly channel which is illustrated on the attached chart. This top is at 1.2920, which is also Aug 18th high. When we take look at the hourly chart, we can spot an interesting support at 1.2777. This support is formed by Aug 27th high, and on Thursday, the price stopped 3 pips below it during the Asian session and 2 pips above it during the European sessions, which adds to its importance. Moreover, the rising trend line from Aug 31st low is now at 1.2837, providing the most important short term support. So, we will be in a neutral zone between 1.2920 & 1.2837, waiting for a break! If we break the resistance 1.2920, nothing will stop the Euro from reaching 1.3000, then the most important short term resistance 1.3047. On the other hand, support is at 1.2837, and if broken, we will drop to test the important 1.2777, and if broken, a strong drop will target 1.2676.

Support:
• 1.2837: the rising trend line from Aug 31st low.
• 1.2777: last week’s top, Aug 27th high, an obvious hourly support, and the rising trend line from Aug 31st low on the hourly chart. The single most important short term support without a shadow of a doubt.
• 1.2676: the bottom of the rising channel on the hourly chart.

Resistance:
• 1.2920: the top of the rising trend channel on the hourly chart, and Aug 18th high.
• 1.3000: psychological level.
• 1.3047: Fibonacci 61.8% level for the drop from the 4-month high of 1.3332.

---

GBP/USD

The Pound jumped after the market open and went back to test the important resistance area 1.5480/90, which was tested on the first day of this month, and dropped from there with more than 100 pips at that time. This area is formed between the short term Fibonacci 61.8% level at 1.5480, and Sep 1st high. Will the price break it or will it frustrate it again just like it did 5 days ago? We strongly believe that the reaction from this area is the single most important thing that will determine the direction for the next few hours. If we break it (And here we prefer a break of the top of the area at 1.5490, not the Fibo level at 1.5480), the price will jump to 1.5565, and may be later to 1.5669. On the other hand the support is at 1.5442, and breaking this level would mean we are getting far from the important 1.5480/90, and a new drop will start. The targets for such a drop are 1.5349, and 1.5262. everything depends on the reaction from the all important 1.5480/90.

Support:
• 1.5442: the rising trend line from Friday’s low on intraday charts.
• 1.5349: Thursday’s low.
• 1.5262: Jul 5th high.

Resistance:
• 1.5490: the top of the resistance area formed between Fibonacci 61.8% short term & Sep 1st high.
• 1.5565: the falling trend line from Aug 16th high.
• 1.5669: Aug 19th important top.

---

Forex trading analysis written by Munther Marji for Forexpros.

---

Disclaimer:
Trading Futures and Options on Futures and Cash Forex
transactions involves substantial risk of loss and may not be suitable for
all investors. You should carefully consider whether trading is suitable for
you in light of your circumstances, knowledge, and financial resources. You
may lose all or more of your initial investment. Opinions, market data, and
recommendations are subject to change at any time.